Astellas Offers $3.5 Billion for OSI

Astellas Pharma has offered $3.5 billion in cash to buy all outstanding shares of OSI Pharmaceuticals. The unsolicited offer represents a 40% premium above OSI’s share price.

Masafumi Nogimori, president and chief executive officer of Astellas, remarked, “This offer follows our attempts over the past 13 months to engage OSI in meaningful discussions. We firmly believe in the compelling strategic rationale behind the combination and the opportunity it provides to the OSI stockholders to realize full and fair value, in cash, immediately. As recently as February 12, 2010, Astellas presented this proposal to acquire OSI, which reflected a 50% premium on that date.However, we received a response stating that our offer ‘very significantly undervalues’ OSI. That response was the latest indication to us that OSI is not interested in engaging in substantive discussions. We are therefore taking our offer directly to OSI’s stockholders. Our proposal and its significant premium recognize both the value created by OSI to date and its future prospects. Of course, we are open to, and we hope that OSI’s board and management will commence, discussions with us to effect a negotiated transaction.”

OSI markets Tarceva and has several oncology products in its pipeline. According to an Astellas statement, OSI would also augment Astellas’ existing franchises in urology and immunology.